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Leon Hintzen
Lead Demand Manager
Akzo Nobel
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Home  Process Manufacturing Steel
Steel industry
Steel, the backbone material for bridges, skyscrapers, railroads, automobiles and appliances is the world’s third largest commodity market with a market size in excess of US $700 billion (LME).
Today, the steel industry is characterized by fragmented market players, mergers & acquisitions, globalization, market volatility, emergence of new markets and complex supply chain. Other highlights include rising product demand (newer products), increasing input cost, and introduction of newer technologies.
Steel companies are under pressure to reduce cost and increase margins so as to stay ahead of competition. Customers have become more demanding and hence the need for product specialization and additional value added services. The change in demand and supply patterns has added to the complexity of steel supply chain. There is a need to develop a good supply chain to cater to these changing needs at minimum cost. While the needs of a vertically integrated steel plant is different from that of a standalone mill, nevertheless steel industry as a whole is experiencing similar challenges across the globe.
The current industry challenges include:
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Mergers and Acquisitions – Steel industry is in need of application & business process integration tools and service providers due to mergers & acquisitions. Cultural and geo-specific legal & statutory needs add another complexity to this problem. |
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Unfavourable supply chain dynamics – This causes delay in responding to customer demand, supply spikes, over capacity and soaring costs across supply chain. |
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High costs of procurement - Increasing raw material, transport and energy cost has increased the cost of procurement. |
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Manufacturing operations - Existence of mixed (old and new) technology, old plant layouts, inefficient operations are few of the operational issues. Optimal utilisation of key assets, decision on the best product mix, improving product quality and yields contribute heavily on production cost. |
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Managing inventory – Maintaining optimal level of finished goods, raw material and WIP inventory to meet varying market demand and adding to the bottom line of the company. |
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Accurate Planning – This comprises forecast accuracy, production planning, scheduling and shipment planning |
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Integrated Logistics operations: Companies aspire to have the best of in-bound and out-bound logistics management system in place |
To tackle these challenges, we suggest a holistic approach to the key aspects of operations like:
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Customer Management: This requires understanding the customer, segmenting them and offering differential service at optimum price level. Customers want reliability, speed, flexibility and transparency. |
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Order Management: Accurate and timely execution of orders can lead to high customer satisfaction and revenue growth .Automated customer interface, online ordering, improved service and Available to Promise (ATP) are very important components of Order management. |
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Production consistency: This is necessary for better planning and improving the delivery compliance and this can be achieved by process improvement initiatives. Well-conceived & integrated Manufacturing Execution System (MES) enhances production efficiency. |
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Planning and Forecasting: This includes forecasting, sales and operation planning, production scheduling and distribution planning etc. |
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Materials Management: This include strategic sourcing, improved procurement process and supplier relationship management. |
Wipro Offerings
Wipro consultants can help Steel companies across the globe in the area of supply chain optimization, after sales support systems, application of RFID technologies, logistics tracking & optimization and continuous process improvement through Six Sigma consulting offerings.
Wipro also offer solution frameworks for pain areas like tracking of steel coils in warehouse/shop floor, slab/billet yard management, roll shop management, performance parameter tracking, plant level inventory management and reporting systems. We can customize these frameworks to the requirements of individual organization needs and provide customized solutions which can be easily integrated with rest of the IT applications.
In addition, we bring consulting skills and best practices in areas like inbound supply chain, manufacturing process optimization and outbound supply chain. |
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